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Former Logicon Exec Targeted in SEC Case

Regulators allege that Vincent Steckler aided accounting fraud at Legato Systems, which later restated its results.

September 09, 2003|From Bloomberg News

A former executive at a Northrop Grumman Corp. subsidiary aided and abetted accounting fraud at Legato Systems Inc., a California software company, the Securities and Exchange Commission alleged in a lawsuit filed Monday in San Francisco.

Vincent Steckler, a former Logicon Inc. vice president, helped Legato sales executives prematurely book revenue on a sale to Logicon when Logicon, a Herndon, Va.-based defense contractor, was not committed to paying for the software, the SEC said.

As a result Legato overstated its 1999 third-quarter operating income by 146%.

The SEC last year charged Mountain View, Calif.-based Legato and three former executives in connection with the restatement of its financial results for the last three quarters of 1999.

The charges followed regulators' increased scrutiny of accounting at software companies.

"Sales executives who book phony deals often rely on assistance from people who work for their customers," said Helane L. Morrison, district administrator for the SEC's San Francisco District Office.

"Today's action highlights the commission's resolve to hold such persons responsible when they knowingly assist in fraudulent revenue recognition practices."

Steckler's attorney, Daniel Bookin, didn't return a call seeking comment.

Logicon is now Northrop Grumman Information Technology, a division of Los Angeles-based Northrop Grumman.

A spokeswoman for Northrop Grumman Information Technology said Steckler left the company on Sept. 1, 2000, and noted that the SEC cited Steckler, not the company.

The SEC's lawsuit, filed in federal court in San Francisco, said Steckler helped two former Legato sales executives draft a "side letter" to the order granting Logicon the right to cancel the transaction.

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